cenvat credit on service tax

[ashish yadav]

Dear Sir

Kindly reconfirm once again there are certain Invoice raised by the

labor contractor and security as they were provided service to our

excise unit at Tarapur the invoice dated 2/4/2015 and the payment

of service tax paid by us in the Month of Aug-2016 along with the

Interest. The same can be taken credit in our excise book.

This is because of one year period of date of invoice or date of payment ?

[DR.MARIAPPAN GOVINDARAJAN]

CENVAT credit can be taken within one year from the date of invoice provided the payment is made. In your case your invoice date is 02.04.2015. The date of payment is August 2016. Hence more than one year has been lapsed. You cannot take credit on service tax and utilize the same.

[ashish yadav]

dear sir,

it is cenvat its service tax.

[Rajagopalan Ranganathan]

Sir,

For taking cenvat credit it shall be taken within one year from date of invoice. Payment of the bill raised by the service provider is not the criteria for taking credit. If you avail the credit of service tax paid by the service provider and if you do not pay the bill within 3 months from date of receipt of the bill then you have to reverse the credit taken and you can take back the credit after making payment to the service provider. In your case the date of invoice is 02/04/2015 and since one year has already elapsed on 02/03/2016 you are not eligible to take the credit.

[YAGAY and SUN]

We also have the same opinion on this matter that beyond the prescribed time limit, CENVAT credit would not be allowed.

[Ganeshan Kalyani]

I also of the opinion as expressed by Experts.

In my view if the amount is substantial then you must write to the authority. The time limit provided is for the purpose of bringing discipline amoungst the dealer. You must make a try.

[Venkataprasad Pasupuleti]

Dear sir,

If the service tax on security/labour contractor is paid under reverse charge (i.e. by service receiver directly to government) then time limit for availing credit is starts from the date of service tax payment (challan date) irrespective of vendor invoice. You can take credit

however in case service tax is paid to vendor, i agree with above views expressed.

[Ganeshan Kalyani]

The time limit is from the date of invoice in case service tax is charged by service provider on the invoice.

AI Summary

Cenvat credit timing: generally measured from the supplier's invoice date, with reverse charge exceptions on payment date.
Credit must generally be availed within one year from the supplier's invoice date; payment to the supplier does not determine that period. If credit is availed but the recipient fails to pay the supplier within three months of bill receipt, the credit must be reversed and can be re availed after payment. If service tax is paid by the recipient under reverse charge, the time limit runs from the date of tax payment (challan), not the invoice.